Experts warn Trump’s economy 'signals a recession' as business leaders’ confidence cuts in half

Newsweek reports business leaders' confidence in the U.S. economy has halved, according to JPMorgan Chase & Co.

Companies appear to be grappling with the impact of President Donald Trump's tariffs and the geopolitical uncertainties he causes, says the firm's latest Business Leaders Outlook Survey. The study found optimism for the economy falling to 32 percent in June, down from January’s 65 percent. Additionally, 25 percent of respondents said they expect a recession to occur at some point this year, reflecting more than double the 8 percent recorded in January.

Trump's trade agenda is the seat of the problem, with stock market volatility and heightened fears of rising costs for businesses and consumers fueling shivers, reports Newsweek. The temporary easing of trading tensions between the United States and China appears to have only tempered anxiety, not eliminated it.

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“Four in 10 (44 percent) reported delaying their business plans to some extent this year, with 74 percent citing ‘policy uncertainty’ as the reason for this decision,” Newsweek claims. “Of this group, 37 percent cited market volatility and shifts in customer demand, while 35 percent listed geopolitical events as a contributing factor.”

Fifty-five percent of survey respondents cited “uncertain economic conditions” behind their outlook, while 41 percent blamed tariffs. Newsweek reports this drop mirrors a 26-point decline recorded in an earlier survey of CEO confidence for the second quarter, which at “34” registered below the 50-point threshold—the lowest level since the end of 2022.

Additionally, The Consumer Confidence Index fell by 5.4 points in June to 93.0, despite consensus forecasts anticipating an improvement from May, claims Newsweek. And the Present Situations Index, which measures consumers' perceptions of current business and labor market conditions, also fell, as did the short-term Expectations Index to 69.0, well below the 80-point “threshold,” cited by economists.

The think tank said this "typically signals a recession ahead."

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“When uncertainty is high, there is a strong incentive to defer … major business decisions, whether investment or staffing, until the situation is clearer,” said Matthew Martin, U.S. senior economist at Oxford Economics. “This is a major reason to expect private fixed investment to decline this year, contributing to slower growth overall, and a slower pace of business hiring, which will slow the rise in real income growth (and therefore consumer spending).”

Read the full Newsweek report at this link.